FYI... I have been facing the same issue installing Hardy Beta Alternate
and Server Editions on an OQO Model 02, VirtualBox, and in VMWare
Server.

I've successfully been able to work around the grub installation failure
in all cases by doing the following:

1. When the installer goes to the red screen regarding GRUB faling to
install, I hit ok until it takes me back to the installer menu asking
whether to install GRUB, Lilo, etc.

2. Alt+F2 into another terminal window, and hit enter at prompt.

3. chroot /target

4. "apt-get install grub" which then installs a number of dependencies,
and also generates the initramfs images, etc.

5. After GRUB successfully installs, ALT+F1 bank to the menu, and choose
to "Install Grub".  It's already installed by now the installer gets
further than it did before.  It also asks whether you want to install
GRUB to the MBR which I accept.

The installer completes, and CD ejects, and GRUB is installed without
any apparent issues.

I have not tried a newer (daily/nightly) install CD, so I'm not sure if
this has been corrected already.

-- 
GRUB won't install in text mode in hardy alpha 4
https://bugs.launchpad.net/bugs/192938
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